What ERP does it means?

Enterprise resource planning (ERP) systems integrate internal and external management of information across an entire organization—embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc.

ERP systems automate this activity with an integrated software application. ERP facilitates information flow between all business functions inside the organization, and manages connections to outside stakeholders.

Enterprise system software is a multi-billion dollar industry that produces components that support a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the past decade. Enterprise systems are complex software packages that offer the potential of integrating data and processes across functions in an enterprise. Although the initial ERP systems focused on large enterprises, there has been a shift towards smaller enterprises also using ERP systems.

Organizations consider the ERP system a vital organizational tool because it integrates varied organizational systems and enables flawless transactions and production. However, an ERP system is radically different from traditional systems development. ERP systems can run on a variety of computer hardware and network configurations, typically employing a database as a repository for information.

What does effect commodities prices?

Commodity risk refers to the uncertainties of future market values and of the size of the future income, caused by the fluctuation in the prices of commodities. These commodities may be grains, metals, gas, electricity etc.

A commodity enterprise needs to deal with the following kinds of risks:

  • Price risk (Risk arising out of adverse movements in the world prices, exchange rates, basis between local and world prices)
  • Quantity risk
  • Cost risk (Input price risk)
  • Political risk

There are broadly four categories of agents who face the commodities risk:

  • Producers (farmers, plantation companies, and mining companies) face price risk, cost risk (on the prices of their inputs) and quantity risk
  • Buyers (cooperatives, commercial traders and trait ants) face price risk between the time of up-country purchase buying and sale, typically at the port, to an exporter.
  • Exporters face the same risk between purchase at the port and sale in the destination market; and may also face political risks with regard to export licenses or foreign exchange conversion.

Governments face price and quantity risk with regard to tax revenues, particularly where tax rates rise as commodity prices rise (generally the case with metals and energy exports) or if support or other payments depend on the level of commodity prices.

Why Cash management is crucial?

Cash management refers to a broad area of finance involving the collection, handling, and usage of cash. It involves assessing market liquidity, cash flow, and investments.

It refers also to certain services related to cash flow offered by banks primarily to larger business customers. In particular could be used to describe specific services such as cash concentration, zero balance accounting, and automated clearing house facilities.

Financial instruments involved in cash management include money market funds, treasury bills, and certificates of deposit.

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